Recovery trend continues in first half year

Zurich, August 27, 2004, 7.15 a.m. – In the first half of 2004 Quadrant reported net sales of 247.1 million Swiss francs, compared with 205.4 million Swiss francs in the first half of 2003.

This strong sales growth of 20% resulted in higher capacity utilization and a substantial improvement in earnings. Operating profit before depreciation and amortization of goodwill (Ebitda) amounted to 43.1 million (vs. 27.7 million) Swiss francs, equivalent to an increase of 56%. Net profit rose even more steeply to 20.2 million (vs. 7.1 million) Swiss francs before and 13.1 million (vs. -0.1 million) Swiss francs after amortization of goodwill. Shareholders' equity totals 182.5 million (vs. 172.2 million) Swiss francs, equivalent to an equity ratio of 35% (vs.31%).

Both divisions contributed equally to the pleasing half-year results. The high-performance plastics and the plastic composites / cable protection conduits activities each recorded sales gains of 20%.

The signs of market recovery which were already apparent at the end of the previous year and during the first quarter of the current year have remained in evidence and spread to almost all of Quadrant's major geographical markets (Western Europe, North America, Asia). Customers in the capital goods industry have become more confident again and increased their orders. Since a backlog of demand to replenish inventories was added to requirements for current

production, Quadrant's sales growth was disproportionately high. Part of the strong rise in sales recorded in high-performance plastics operations during the first six months was therefore of an exceptional nature. However, new products and applications launched on the market also contributed to sales growth alongside the overall revival in the inclination to invest.

Cash flow from operations before changes in net working capital increased to 28.3 million (vs. 16.8 million) Swiss francs. The substantially higher level of sales also resulted in an increase in net current assets. The healthy liquidity position at the end of the half-year also enabled exceptional terms and

conditions of supply to be exploited by making advance payments to suppliers. This resulted in a disproportionate increase in net current assets. The resulting commitment of funds on reporting date reduced cash flow from operations (6.8 million Swiss francs) compared to the same period of the

previous year (22.1 million Swiss francs). The cash generated was utilized for capital expenditure and for regular repayments of liabilities to banks. With liquid funds of 30.0 million Swiss francs, net debt amounted to 170.1 million (vs. 200.3 million) Swiss francs on June 30. Furthermore, in order to take

account of the changes in the overall economic environment since the syndicated loan was granted at the beginning of 2001, it has been agreed with the consortium of lending banks that semi-annual Quadrant AG – press release dated August 27, 2004 Page 2

amortization payments relating to the loan, which repayments have since already reduced to 190.5 million Swiss francs, will be lowered in future. Minimum amortization payments will now be between 9 million Swiss francs and 17 million Swiss francs every six months for the next four years (vs. 21 million Swiss francs previously). This reduction will enable Quadrant to continue to take optimum advantage of its growth opportunities even in periods of economic turbulence.

Confident outlook

On the basis of the encouraging first half, a substantial rise in sales and earnings can be expected for the year as a whole compared with the previous year. The size of the increase depends essentially on further geopolitical and global economic developments, which will continue to influence the investment climate. Independent market observers are inclined to the view that there will be a cyclical easing in market demand towards year-end. It should also be borne in mind that – given constant external market conditions – the first six months of the year are usually slightly stronger than the second h

Reader enquiries

Quadrant
Talstrasse 70
CH-8001 Zurich
Switzerland
+41 (0)44 213 66 66
info@​qplas.com
www.quadrantplastics.com

---

Notes for editors

Quadrant is a global leader in high-performance polymer material solutions in the form of semi-finished and finished products. These specialty engineering thermoplastics and composites are superior in performance

over metals and other materials, and are used in a growing number of applications developed with leaders in a wide range of industries.

With 1 300 employees at 27 specialised locations worldwide, Quadrant generates sales of over 400 million Swiss francs. Thanks to its clear strategic orientation and focus Quadrant is well positioned and prepared to

create added value on a consistent and sustainable basis for its customers and shareholders and to further expand its market leadership.